Forex news from the European morning session - 25 June 2019
Headlines:
- New British PM will be announced on 23 July
- Boris Johnson says 31 October is "do or die" date for Brexit
- UK June CBI retailing reported sales -42 vs -5 expected
- The threat of the SNB continues to keep the franc at bay for now
- Iran says fully prepared to tackle US sanctions but will not reveal its plans
- Boris Johnson: Current Brexit deal is 'basically dead'
- China reiterates that trade teams are working on Trump-Xi meeting
- France June business confidence 106 vs 106 expected
- Iran says that new sanctions mean diplomatic path is closed 'forever'
Markets:
- NZD leads, CHF lags on the day
- European equities slightly lower; E-minis down 0.1%
- US 10-year yields down 0.8 bps to 2.00%
- Gold up 0.7% to $1,429.10
- WTI down 0.3% to $57.73
- Bitcoin up 4.7% to $11,362
The greenback is starting to find some steady footing as markets remain focused on US-China trade talks, awaiting the Trump-Xi meeting at the end of this week. As such, there's some wavering in market sentiment with equities slightly weaker and Treasury yields near flat levels amid geopolitical tensions between US and Iran.
There are hints of caution as the yen holds firmer with USD/JPY settling near the 107.00 handle after slipping to a low of 106.78 in early trades. But markets aren't really leaning towards a major risk-off move with month-end and quarter-end flows also at play.
EUR/USD is slightly weaker as buyers are failing to find a firm break above the 1.1400 handle but from a technical perspective, the slight drop so far today isn't suggestive of anything to reverse sentiment from the post-FOMC moves.
Gold continues to be a star performer as it looks to extend a break above $1,400. With geopolitical tensions and slight concerns about US-China trade talks, it's helping to keep bullion bid alongside the narrative of easing global central banks.
The franc is a notable underperformer as there is chatter about the SNB intervening after EUR/CHF threatened to slip below last week's low of 1.1057 early on in the session. The pair now settles near session highs in a solid climb to 1.1123 from the lows earlier.
Looking ahead, it's all about the anticipation ahead of the Trump-Xi meeting but up ahead today there's also Fed chair Jerome Powell speaking at 1700 GMT. I reckon we could see some profit taking from last week's post-FOMC moves throughout the week but as mentioned above, month-end and quarter-end flows will also mess up the picture a little.
